Experts warn of Renters (Reform) Bill eviction loophole

Private rented sector experts have identified a loophole in the Renters (Reform) Bill that could lead to a confusing patchwork system for landlords and tenants over evictions.

The Bill, which aims to abolish Section 21 ‘no-fault’ evictions might not deliver on this promise.

That’s according to Oli Sherlock, the managing director of insurance at Goodlord, and Ryan Heaven, a solicitor at Dutton Gregory Solicitors.

Their analysis suggests that despite a pledge from Michael Gove, the housing secretary, to end Section 21 before the next General Election, some landlords could still use it.

Section 21 would be ‘outlawed’ before the election

Mr Heaven said: “A lot of people place emphasis on Michael Gove stating that section 21 would be ‘outlawed’ before the election, but when you examine the Bill closer this is not what will happen.

“Whenever the election date is there will be some landlords in this country who will still be able to serve a section 21 notice even if others are not able to.”

Essentially, the Bill will create three broad tenancy types – and one of them will allow Section 21 enforcement:

• A new tenancy created after the Bill has been implemented: Landlords won’t be able to serve a Section 21 notice after this date
• Any fixed-term tenancy that becomes periodic once the Bill has been implemented: Landlords would still be able to serve a Section 21 notice until the tenancy switches over to a periodic one. However, once that happens, the new rules apply, and landlords can’t serve a section 21
• Tenancies that are periodic when the Bill is implemented: For these tenancies, landlords will still be able to serve a Section 21 until the Government reviews the court system, reports on it to Parliament, and then sets an ‘extended implementation date’ at which point the new rules all apply to all tenancies.

This final scenario will see landlords being able to serve a Section 21 notice after the election.

‘Apparent promise to delay the scrapping of Section 21’

Mr Sherlock said: “As the Bill currently stands, it seems that the apparent promise to delay the scrapping of Section 21 to allow for court reform is not what it seems.

“Instead, it appears that the market will be delivered a fragmented process which sees some tenancies permitting Section 21, some not, and others that could fall into either camp depending on how a tenancy renewal is handled.

He added: “This would all be taking place alongside an investigation into the courts, which currently has no confirmed timeline or identifiable metrics for success.

“The deep irony here is that the very same courts will be managing more and more cases deriving from tenancies where section 21 has already been outlawed.

“Arguably this is the worst outcome for all parties.”